So here it is, post #1:
Recently, in discussing healthcare reform (with conservatives in particular), cost is the most frequently cited objection. My typical response is “Well, what about those immensely costly wars we’re fighting? If we swapped universal coverage for no war, we’d end up with a net positive effect on the deficit.” Their rebuttal: We’d be much more susceptible to terrorist attacks, so we MUST continue fighting.
Must we? We’re all going to die eventually, it’s inevitable (or is it? More on that in another post). To say we’re fighting a war to prevent terrorist attacks is equivalent to saying we’re fighting to prevent our citizens from being killed and our resources destroyed. Healthcare reform, particularly universal coverage, also aims to prevent our citizens from being killed, albeit by a different source. So I ask, what is more cost-efficient?
First, some assumptions we’ll make:
- If we left Afghanistan and Iraq there would be one 9/11 equivalent attack per year (or many small attacks whose sum is equivalent to 9/11).
- 3000 people were killed on 9/11, 500 US soldiers are killed per year (on average) in Afghanistan and Iraq
- The cost of resource loss in a 9/11 equivalent attack is $38.1 billion. This is an aggregate of figures from here. Range figures were averaged and only “tangible” losses were considered (buildings, aircraft, cleanup, other infrastructure damage). I ignore the others because some are not easily measurable estimates and/or are confounded by the dotcom bubble burst. Also, the effect of terrorism on financial markets in a scenario with such a high frequency of attacks would likely be subject to diminishing returns. Finally, others, such as “insurance losses”, are really double counting.
- The average age of a victim in the terrorist attack is 40 (average from 9/11, should be reasonably representative). The average age of a soldier in Iraq and Afghanistan is 30. The average life expectancy in the US is 74.7 for males and 80.05 for females, I’ll use 75 for simplicity Sources: 9/11 / Soliders
- There are 30 million “uninsured” Americans. This is a compromise figure between the 15 and 45 I hear cited by partisan sources. It’s also the number of additional people that HR3200 (it’s actually HR3962 now) would help to cover. I’m not necessarily endorsing HR3200, since I think it may have some flaws and we could probably do better, but it’s at least a tangible plan we can run some numbers with. (I’ll likely weigh in more on the bill itself later).
The average ages matter here because measuring the prevention in “total lives” is inaccurate. Instead, we’ll measure life years gained/lost. For example: the prevention of a terrorist attack which would kill a 40 year old person had a gain of 35 life years. Using the aforementioned assumptions we can calculate the following:
3000 victims saved per year x 35 years gained = 105,000 life years gained per year
500 soldiers killed per year x 45 years lost = 22,500 life years lost per year
The net effect is 82,500 life years gained by fighting “the War on Terror.” At this point, I don’t know how many life years are gained by having health insurance and I’m not sure how particularly measurable the effect is, but I will assume it is positive, since it wouldn’t exist if it weren’t. Instead of trying to measure it, we can calculate the minimum required net gain for it to be equivalent to “the War on Terror” (assuming all other costs are equal):
82,500 life years/30,000,000 uninsured = .00275 life years gained per person, or ~1 DAY
Universal coverage needs to extend life a hair more than one DAY to be equally effective a preventing death.
I’ll add some nice general formulas here once I get LaTeX installed.
As I mentioned, we assumed the costs of the war and universal coverage are equal, but they’re not, so let’s take that into consideration:
Congress will have authorized $944 billion to be spent fighting in Afghanistan and Iraq (note this is NOT part of the typical defense budget) through the end of FY2009, Or $134 billion per year, but in the assumptions we’re saving $38.1 billion per year in resources, so the net cost is $95.9 billion per year.
The CBO estimates that the overall cost of HR3200 to be $1.032 trillion over the next 10 years, but because it generates additional savings ($219 billion) and an increase in revenue ($583 billion) the net cost is $239 billion, or $23.9 billion per year.
Or, for every 1 dollars you spend on health care reform, you’d need to spend a little over 4 dollars on defense to get the same gain in life years added.
Combining the dollar effectiveness with our initial calculation of the minimum required net gain of health care reform lowers the minimum to .25 days, or around 6 hours. Or the absence of troops would have to lead to there being FOUR 9/11s every year.
If we go ahead make the assumption that health insurance adds 1 year to life (I’d be surprised if it were lower), you could say that it’s 1500 times more cost effective at extending life than the wars in Afghanistan and Iraq. Or, you’d need 4 9/11s per day.
As if that scenario weren’t ridiculous enough, it’s based on the assumption that the wars have a direct impact on terrorism, and reduce it by 100%.
Now, raise your hand if you want to keep fighting.
Update: Apparently Nicholas Kristof at NY Times had a similar thought
